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Tuesday, 3 September 2013

Microsoft to acquire Nokia's devices business

Microsoft has formally announced to acquire the Nokia Devices and Services division for $7.2 billion and the deal is expected to close next year 2014.

Microsoft and Nokia entered into a partnership three years ago for making Windows Phone based smartphones. Today, Microsoft announced to purchase Nokia's Devices & Services division, license Nokia's patents, and also license and use the Nokia's mapping service HERE. Microsoft will pay $7.2 billion in cash to Nokia and the transaction is expected to close by early 2014.

Nokia has enjoyed its reign as the top mobile seller for several years. It later joined hands with Microsoft to offer Windows Phone mobile operating system based devices in 2010. Now Microsoft is buying Nokia's device business - to be honest, many saw this coming.

Steve Ballmer, Microsoft chief executive officer, said, "It's a bold step into the future - a win-win for employees, shareholders and consumers of both companies. Bringing these great teams together will accelerate Microsoft's share and profits in phones, and strengthen the overall opportunities for both Microsoft and our partners across our entire family of devices and services."

After the transaction, Nokia's key top level employees will be part of Microsoft team. Microsoft gets more control over a hardware company and can engage into more innovations in terms of hardware as well as software. Nokia gets more financial strength and work closely with the team that developers Windows Phone platform.

Microsoft was getting about $10 for every Nokia Windows Phone device sold as reported by AllThingsD. Quite obviously Microsoft can see the potential of earning more per device sold.

Nokia is expected to introduced large screen phablet - Lumia 1520 and also Windows RT based Sirius tablet in coming months.